Thomas Frey: By 2030 over 50% of Colleges will Collapse

Thomas Frey provides an analysis of current trends in education (and, more broadly, learning) and predicts a grim future for colleges and, by extension, schools and universities. This is not a uniformly well-informed article – Frey is clearly an outsider with a somewhat caricatured or at least highly situated US-centric view of the educational system – but, though repeating arguments that have been made for decades and offering no novel insights, the issues are well summarized, well expressed, and the overall thrust of the article is hard to argue with.

His main points are summarized in a list:

Overhead costs too high – Even if the buildings are paid for and all money-losing athletic programs are dropped, the costs associated with maintaining a college campus are very high. Everything from utilities, to insurance, to phone systems, to security, to maintenance and repair are all expenses that online courses do not have. Some of the less visible expenses involve the bonds and financing instruments used to cover new construction, campus projects, and revenue inconsistencies. The cost of money itself will be a huge factor.

Substandard classes and teachers – Many of the exact same classes are taught in thousands of classroom simultaneously every semester. The law of averages tells us that 49.9% of these will be below average. Yet any college that is able to electronically pipe in a top 1% teacher will suddenly have a better class than 99% of all other colleges.

Increasingly visible rating systems – Online rating systems will begin to torpedo tens of thousands of classes and teachers over the coming years. Bad ratings of one teacher and one class will directly affect the overall rating of the institution.

Inconvenience of time and place – Yes, classrooms help focus our attention and the world runs on deadlines. But our willingness to flex schedules to meet someone else’s time and place requirements is shrinking. Especially when we have a more convenient option.

Pricing competition – Students today have many options for taking free courses without credits vs. expensive classes with credits and very little in between. That, however, is about to change. Colleges focused primarily on course delivery will be facing an increasingly price sensitive consumer base.

Credentialing system competition – Much like a doctor’s ability to write prescriptions, a college’s ability to grant credits has given them an unusual competitive advantage, something every startup entrepreneur is searching for. However, traditional systems for granting credits only work as long as people still have faith in the system. This “faith in the system” is about to be eroded with competing systems. Companies like Coursera, Udacity, and iTunesU are well positioned to start offering an entirely new credentialing system.

Relationships formed in colleges will be replaced with other relationship-building systems – Social structures are changing and the value of relationships built in college, while often quite valuable, are equally often overrated. Just as a dating relationship today is far more likely to begin online, business and social relationships in the future will also happen in far different ways.

Sudden realization that “the emperor has no clothes!” – Education, much like our money supply, is a system built on trust. We are trusting colleges to instill valuable knowledge in our students, and in doing so, create a more valuable workforce and society. But when those who find no tangible value begin to openly proclaim, “the emperor has no clothes!” colleges will find themselves in a hard-to-defend downward spiral.

It is notable that many of the issues raised are fully addressed by online universities like AU, and have been for decades. We have moved on to bigger and more intractible problems! In particular, the idea that classes and teachers are a fixture that cannot be changed is a bit quaint. It is also fair to say that Frey has only a rough idea of how education works: the notion that high quality lectures has anything much to do with learning or the university experience shows a failure to understand the beast – but then, the same is true of potential students and more than a few professors. But pricing competition, credentialling competition, relationship-building and, above all, the ’emporer has no clothes’ arguments hit home, and I think will have the effects he anticipates much sooner than 2050. Nothing new here, and a bit coarse, but it clearly expresses the stark reality of the consequences.

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I am a professional learner, employed as a Full Professor at Athabasca University, where I research lots of things broadly in the area of learning and technology and teach mainly in the School of Computing & Information Systems, of which I am the Chair.
I am married, with two grown-up children, and live in beautiful Vancouver.